We are using a yeast system we constructed earlier that allows us to evaluate function of any Hsp70 isoform in yeast. We are using this system to investigate Hsp70 homologs within and across species with regard to cell growth and propagation of different prions. This very sensitive system gives us the unique ability to distinguish exquisite functional differences among nearly identical Hsp70 isoforms and provides a means to approach the problem of uncovering the underlying mechanisms. The constitutively expressed S. cerevisiae Hsp70 isoforms Ssa1 and Ssa2 are 98% identical and their stress-inducible counterparts Ssa3 and Ssa4 share 88% identity and are 80% identical to Ssa1/2. Using our system we have identified structural regions between Ssa1 and Ssa2 that underlie the differences in the way these isoforms function in both prion propagation and protein degradation. Having identified the Hsp70 regulatory ATPase domain as responsible for the differences, we then identified a specific residue of this domain (G83 or A83) as solely responsible. We show enzymatic activities of Ssa1p and Ssa2p to be nearly the same, suggesting the difference in phenotypes is probably conferred by differences in how this residue of Ssa1p and Ssa2p influences interaction with one or more of the many co-chaperones that regulate Hsp70. We further found that this same residue defined a functional distinction between Ssa1p and Ssa2p in a vacuolar-mediated protein degradation pathway. The data show how an exquisitely fine difference in structure can determine functions of nearly identical Hsp70s and imply that regulation of Hsp70 substrate interactions, rather than substrate binding per se, is the important parameter that determines functional distinctions. Our findings show that the ATPase domain is more than a regulatory domain in that it also specifies function, and provide insight into how nearly identical Hsp70s can behave differently not only in the processes that yeast prions need to grow and replicate, but also in important cellular processes. Our work emphasizes the importance of subtle differences in Hsp70 activity, and reveals that the smallest difference in structure of proteins whose functions overlap in many ways is all that is needed to direct them to perform specialized tasks in the cell.